Business News of 2014-04-27

Government increases tax rate for free zones companies

Government has made an upward adjustment to the corporate tax rate for free zones companies producing for local consumption.

Companies within the free zone enclave will be taxed 25 percent instead of 8 percent as corporate tax for goods and services meant for the local market.

An economist with the tax policy unit of the finance ministry, Seth Anorf told Joy News' Eastern regional correspondent, Kofi Siaw at a stakeholders’ forum in Koforidua that the move is aimed at ensuring equity in the payment of corporate income tax between free zones companies and the local industry.

According to Seth Anorf, the decision will in no way be a disincentive for companies within the free zones enclave, which produce 30 percent of their goods for the local market. "The idea of the Free Zones is for the purposes of producing for the exportation so their core business is not for the local market. So it will not be a disincentive to them but rather [enhance equity and fairness]. We need to have a fair playing ground".